Quote:
Fair enough. I should worded it differently.
Checking accounts are for people who can afford to pay exorbitant fees. Sound better?
Banks make most of their money off overdraft fees. I used to work in a bank (BOA, actually). I was a softie, always reversing fees for people who asked. Until a coworker saw me, and said I shouldn't reverse fees because "that's our Christmas bonus" I was throwing away.
Here's a scenario: You have no cash, but you have $6.00 in checking. Your baby needs diapers, so you go to pick some up. Unfortunately, the store is sold out of the cheapy diapers, so you have to buy the semi-cheapy diapers, which are exactly $6.00. Including tax, they come to $6.42. No problem, right? You can write a check, and it won't clear for a couple days. You have a $50 direct deposit going in the next day, so all's well.
You write the check.
But wait a minute. Unbeknownst to you, that store uses the same bank you do. So at the end of the day, when they make their deposits, your check sails on through with no waiting.
It's a chain reaction, because when you looked at your $6 balance, you were being technical and going by your checkbook ledger. Your current balance was actually $42, because your water bill payment check hadn't cleared yet. The $36 water check goes through AFTER the store check. You're only 72 cents in the hole, but now you have a $33 fee.
Your direct deposit goes through, all $50 of it. After covering $33.72, you're left with a whopping $16.28. But you don't know this yet, because the bank doesn't tell you that the store check cleared already. You write a check for $20 because you direct deposit cleared. Only now,
That's why a person should never go by what the balance of your account shows online. I go by the running balance I keep in my checkbook. That way there are no surprises. I never plan on a check taking a couple of days to clear. That's the way it was years ago, but it's not that way anymore.
A checking account can be for anybody, but that person has to be responsible for knowing what he or she has in the bank and what payments are still outstanding. Then they won't have to worry about paying any fees....exorbinant or otherwise.
Exactly Katy..... and thank you - I agree 100%.
Hoboken: Still sorry you feel that way and there was no reason to get snippy... it is what it is and its the responsibility of the account holder, not the bank. If you dont have the money IN your account - you shouldnt write checks on it because you dont know what bank others use and alot of places now debit electronically. So dont write a check you cannot cover immediately, its that simple. Now a days you dont even have to SIGN your check for it to go through - why do I know this? Because I forgot to sign a check I wrote to my insurance company and my bank processed it. Was I on the phone very quickly? YES I was - because it wasnt signed (honest mistake as I was writing out 3 for the same company back to back that morning) - but I was told it didnt matter if it was signed or not because they were all done electronically and ran through, regardless if signed or not. Lesson learned.
If people would budget and keep track of their money - continual overdrafts wont happen, its that simple. Do people make mistakes? Absolutely they do, and sometimes a bounced check is an oversight by forgetting to put in a debit or something. Its when someone constantly causes overdrafts that it becomes an issue. All banks take out checks/debits first - then put deposits in afterwards, it will go in the order they post. In your defense however, I have heard nightmares about Bank of America and Wells Fargo - but - that is not how it works in most banks - and I've never heard of any overdraft fees being a bank employees year end bonus. Thats shameful if that is how it is. Sad for the bank if that is what BOA is doing.
Onward and upward
